Why Milei is blasting an Argentine CEO over pipeline protectionism

Argentine President Javier Milei this week taunted Paolo Rocca, one of the country’s wealthiest chief executive officers, by calling him Don Chatarrín (Mister Scrap Metal). The jibe came after his company lost out on a pipeline construction contract to an Indian company, leading to reported threats of an anti-dumping lawsuit and bringing protectionism roaring into the limelight. Rocca is chief executive of the Argentina-based multinational Techint, an engineering and construction conglomerate. Ever since winning its first bid to construct an oil pipeline in 1949 in Comodoro Rivadavia, it has been the foremost state contractor for large-scale projects in Argentina.  However, last week Tenaris, a metals company within the Techint group, lost out on a bid for a major pipeline contract to the Indian firm Welspun Corp, which was chosen by Southern Energy as its supplier for a massive US$15 billion project to export liquefied natural gas (LNG) from the Vaca Muerta field. It is the first major energy engineering project the company has lost in more than 70 years operating in Argentina. Rocca has been critical of Milei’s open trade policies: Techint also supplied Whirlpool, a home appliances company that shuttered a cutting-edge factory in November after opening it just three years earlier.  At the time, Rocca warned that a huge spike in imported washing machines and fridges was leading many companies to “choose between continuing to produce or closing down and using the commercial chain to distribute imported goods.”  An anti-dumping suit? Techint is one of Argentina’s most important companies, a leading global firm in engineering and steel construction. Tenaris, meanwhile, is the only local manufacturer of pipes for the oil and gas industry. Founded by Paolo’s grandfather Agostino in Italy in 1945, Techint later established its core operations in Argentina.  The news of the lost bid made headlines not only because of the unusual result, but also because of the fallout. Argentine media reported that Techint was considering filing an anti-dumping suit against Welspun. While Techint has not officially announced the move, the complaint would be based on the claim that the Indian firm uses Chinese steel for its pipes, and is thus able to offer much lower prices than Argentina companies.   Deregulation Minister Federico Sturzenegger was the first government official to speak in favor of awarding Welspun the project, arguing that Tenaris’ bid was reportedly 40% higher. The official figures have not been made public, but a Tenaris representative told the Financial Times that that figure was “incorrect.”  “Even if you think they should have won the tender, which was the spirit of the Buy National Goods Law that was thankfully struck down, I think it’s indefensible,” Sturzenegger posted on X, adding that paying more for pipes means less investment, jobs, and exports.  The 2018 Buy Argentine Goods and Develop Suppliers Law, which Milei repealed after taking office, gave Argentine companies priority in state purchases and projects. It sought to help develop local manufacturers in order to insert them into global supply chains, while also creating local jobs.  Close ties The spat is unexpected, mainly because of the government’s close ties with Techint.  One of the Milei administration’s first decisions was to name Héctor Marín, an engineer with decades of experience at Techint company Tecpetrol, as president of oil and gas incumbent YPF. The government also appointed Julio Cordero, an attorney who spent most of his career at Techint, as Labor Secretary.  While the heart of the tussle is Tenaris losing the pipeline bid, the undercurrent revolves around the Milei administration’s views on industrial policy, market competition, and whether the government should protect and promote national enterprise.  ‘An entire production system’ According to Juan José Carabajales, director of Paspartú energy consultancy, the argument for Techint’s higher budget is in line with the former Buy National law.  “Downstream from the pipe line itself, there is an entire production system, from industrial production to service companies, that services Techint,” he said in an interview with El Destape TV.  Such laws collide directly with Milei’s free-market policies. Techint is not the only company to take umbrage at its new competitors from abroad: this week, Argentine e-commerce giant Mercado Libre reported Chinese online marketplace Temu for unfair competition and false advertising. Purchases on the platform made by Argentines have surged by 292% since Milei stripped away restrictions on imports. Yet, Milei is not alone in his crusade. One of the most important backers of awarding the contract to Welspun was Marcos Bulgheroni, chief executive of Pan American Energy, a leading global energy company that is a major stakeholder in Southern Energy. ‘Real willingness to compete’ “Where there used to be a closed and protectionist market marked by pressure and inflated costs, now we’re beginning to have new logic: efficient costs, reasonable margins, and a real willingness to compete in the world,” Bulgheroni posted on X.  “The state is changing. Private actors should too.” Carabajales noted that many countries are taking a more protectionist stance as the China-U.S. trade war disrupts global trade flows. “The world is closing up and imposing tariffs, not just [U.S. President Donald] Trump. One of the side effects of the China-United States competition is that, because Beijing is looking for other markets, we are seeing countries tighten access in order to prevent their local producers from suffering,” he said.  Governments also have other tools to strengthen industrial policy, he added, from funding and promoting exports to offering guarantees for certain products and creating quality jobs.  “Argentina is doing none of these things,” he said.  “All they say is, let the market operate and the companies cannot compete, sorry.”